The presentation captures the meaning, nature and benefits of factoring for a company.

2. MEANING
 Factoring is a source of meeting the present and
immediate cash needs of the organization.
 Factoring is a financial transaction and a type of
debtor finance in which a business sells its accounts
receivable to a third party a discount.
 It is also known as invoice factoring or account receivable
factoring.
 Factoring coverts a non productive, inactive asset
(receivables) into a productive asset (cash).

3.  The client can obtain the cash immediately or from time to
time as and when requirement of cash arises.
 Factoring is offered in two ways:
1. with recourse to the drawer(s)
2. without recourse to the drawer(s)

4. NATURE OF FACTORING
 A financial institution that rendering services pertaining
to the management and financing of sundry debtors is
referred to as a Factor.
 SBI Factors and Commission ltd., Siemens Factoring
private Ltd., Canbank Factors Ltd.
 The factor provides three basic services:
1. Sales ledger administration and credit management.
2. Credit collection and protection against default and bad
debt losses.
3. Financial accommodation against the assigned book
debts.

5.  Cost involved in factoring:
1. The factoring commission or service fees.
2. The interest on advance granted by the factor.
 Benefits of factoring:
1. Improved cash flow
2. Extend payment terms with confidence.
3. Quick funding
4. Easy qualification requirement.